Photovoltaic panels cast long shadows across the pathway at the newly opened Solar Energy centre in Cestas on December 1, 2015. After 10 months of construction, the solar farm in Cestas, understood to be one of the most powerful in Europe, became operational on December 1, 2015. / AFP / MEHDI FEDOUACHMEHDI FEDOUACH/AFP/Getty Images ORG XMIT: 1923 less

Photovoltaic panels cast long shadows across the pathway at the newly opened Solar Energy centre in Cestas on December 1, 2015. After 10 months of construction, the solar farm in Cestas, understood to be ... more

Photo: MEHDI FEDOUACH

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TO GO WITH AFP STORY BY PIERRE DONADIEU This photo taken on November 6, 2015 shows a wind turbines turning in the wind at the Sere Wind farm, close to Vredendal, about 350 km from Cape Town. The Sere wind farm, which consists of 46 turbines, each standing 115m above the ground and producing 2,3 megawatts of electricity, is managed by Eskom, the South African government parasatal charged with electricity supply, and was built by Siemens. Heavily reliant on coal-fired electricity, South Africa is launching ambitious new projects aimed at diversifying its energy sources and avoiding the regular power cuts that have hobbled the economy in recent years. Solar and wind energy plants are mushrooming across the country while the government is planning a huge -- and controversial -- expansion of nuclear power. AFP PHOTO / RODGER BOSCHRODGER BOSCH/AFP/Getty Images less

TO GO WITH AFP STORY BY PIERRE DONADIEU This photo taken on November 6, 2015 shows a wind turbines turning in the wind at the Sere Wind farm, close to Vredendal, about 350 km from Cape Town. The Sere wind farm, ... more

Photo: RODGER BOSCH

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Regulated utilities can produce savings

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New York state is a leader in setting goals for clean energy investment and generation with an ambitious timeline: Establishing 50 percent of the state's electricity from renewables by 2030. To meet that goal, building large-scale solar and wind farms will be essential.

Utility customers will save billions of dollars if regulated utilities, as opposed to independent power producers, own these resources once they are completed. That's because utilities can finance and operate these facilities less expensively than private developers, which will seek costly long-term power purchase agreements paid for by our customers.

Under our model, private power producers would competitively bid to plan, develop and build large solar and wind farms. Once the projects are developed, utilities would own and operate the facilities.

Utilities, as part of the state's ongoing efforts to develop a "large-scale renewable" program, have provided the state with analysis showing that a 100-megawatt wind farm owned by private developers will cost customers $1 billion over the resource's life. Utility ownership of that same wind farm would cost customers $650 million. The utilities' document can be found at: http://on.ny.gov/1QodCAs.

Reasons for the cost disparity are simple.

With utility ownership, customers will realize benefits over the project's life, not just during the term of the contract with the developer. For example, if operating costs can be reduced or debt refinanced, customers would benefit. If technology leads to increased production, customers — not private developers — would keep the additional value.

Market forces would help control costs because private power producers would bid competitively to plan and develop large solar and wind farms and then turn the projects over to utilities.

Power purchase agreements have other drawbacks. These contracts — under which private developers would sell energy from the plants — could reduce the utility's credit rating, raising costs for all customers, even for routine work. New York has already tested the use of long-term power purchase agreements and gotten near-disastrous results.

As a result of legacy power purchase agreements required by state law before the full establishment of organized markets in New York, Con Edison customers' energy costs were increased $4.2 billion above market costs. We witnessed upstate utilities on the brink of bankruptcy because of these contracts.

Many utilities, including Con Edison, have extensive experience with renewables and can run large solar and wind farms efficiently. Con Edison Inc., through subsidiary Con Edison Development, is the sixth largest solar owner in the United States.

We can use that experience to produce savings. That will be good for our customers and our economy.

The writer is vice president for Distributed Resource Integration, Con Edison of New York.